Buying or building a factory in Germany

Many friends and investors ask us: How can we buy all or part of a factory’s shares in Germany? Or how can we set up a manufacturing unit from scratch in Germany? This article from Wise Business Group is a clear, practical, and realistic roadmap for answering these questions and buying or building a factory in Germany.

Read more about Buying a business in Germany

From dream to reality: How to build or buy a factory in Germany?

Germany is not only the largest economy in Europe, but also the beating heart of world industry and manufacturing.

For many entrepreneurs, owning a factory is an old dream. The good news is that Germany is one of the most transparent, structured, and secure countries for making this dream a reality.

But the key question is always:

• Should we build the factory from scratch?
• Or should we buy an active manufacturing unit?

In this article, we share a step-by-step, actionable roadmap with you.

Roadmap for buying or building a factory in Germany

Step one: Defining the “factory vision”

(Before any investment)

Every successful industrial project starts with transparency and a clear picture.

Ask yourself:

🔹What do you want to produce?

• Nutritional and sports supplements
• Food or drink
• Light manufacturing (packaging, assembly, etc.)
• Technological, pharmaceutical, or medical products

🔹On what scale?

• Small or pilot plant (5 to 15 employees)
• Medium factory (20 to 80 employees)

🔹What is your investment range?

• How much personal contribution can you really bring to the project?
• How much banking facility is tolerable and safe for you?

🔹 What is your time horizon?

• Starting production in one to two years
• Or gradual growth over three to five years
• Or even generating income from the very beginning of the project (for example, by purchasing an active factory)

🔹 What is your role in the project?

• Owner + CEO + Direct Management
• Or strategic owner with a professional technical/operational manager

📌 Write all of these on a page titled “Factory Vision”. It is exactly the document that banks, IHK (regional Chamber of Commerce), and Wirtschaftsförderung (regional economic development agency) in Germany request from you.

Step Two to Buying or Building a Factory in Germany: A Simple but Accurate Manufacturing Business Plan

At this stage, you don’t need a 60-page business plan, but you can’t move forward without structure.

Business model

• B2B, B2C or a combination
• Personal brand or contract manufacturing

Market and customers

• Who are your top ten real customers?
• How do you attract them? (Personal Network, Online, Sales Representative)

Production concept

• Target capacity (monthly or yearly)
• Manual, semi-automatic, or fully automatic production
• Key machinery and their cost ranges

Human resources

• Number of production workers
• Production supervisor or quality manager
• Administrative and sales staff

Financial framework

• Initial investment: Building, machinery, installation, working capital
• Fixed monthly costs
• Sales target with a safe margin

📌 This document is the basis for negotiating with banks and receiving government support for buying or building a factory in Germany.

Step Three: Smart use of German infrastructure

Germany is built for industry if you use the system right.

✔ Chamber of Commerce and Industry (IHK)

In these cases, you can seek help from your local IHK:

• Review of the company’s legal structure
• Necessary permits for production
• Introduction of government loans and grants
• Company acquisition and succession opportunities (Unternehmensnachfolge)

✔ Urban economic development (Wirtschaftsförderung)

• Ready industrial land or shed
• Building and zoning laws
• Local and tax incentives

✔ Government support programs

🇩🇪 Federal level (German government)

🔹 BAFA (Bundesamt für Wirtschaft und Ausfuhrkontrolle)

The most prominent reference for:

• Grants for the purchase of machinery
• Energy efficiency
• Digitalization
• Management and technical consulting

📌 Suitable for small and medium-sized enterprises (KMU)

🔹 KfW Bank (German government development bank)

• Low-interest long-term loans
• In some programs, together with a grant (Tilgungszuschuss)
• For factory construction, machinery purchase, renewable energy, and digitalization

📌 Important note: The KfW application is made through your commercial bank, not directly.

🏛️ State level (Land)

Each state in Germany has its own support programs. For example, in the state of NRW:

🔹 NRW.BANK

• Support for factory construction and development
• Job creation
• Industrial investment

💡There are investment grants for new factories in many regions of NRW.

Step Four: Building or buying a factory in Germany, a strategic decision

🏗 Option one: Building a factory from scratch

Advantages

• Precise design according to your process
• New and low-maintenance building
• Access to attractive subsidies

Disadvantages

• Time-consuming
• High complexity
• Capacity planning risk

🏭 Option Two: Purchasing an active factory in Germany

Advantages

• Fast entry into the market
• Personnel, machinery, and licenses ready
• Real financial history

Disadvantages

• Hidden risks
• Old equipment
• Cultural and management challenges

Read more about Buying a factory in Germany

📊 A practical way to decide whether to buy or build a factory in Germany

Give each option a score from one to ten:

• Speed
• Capital required
• Complexity
• Amount of control
• Tolerable risk

Then, use decision-making models for choosing the right path. You need one practical decision for your next 12 months.

Step Five: Financing the factory in Germany

Most successful projects in Germany are a combination of these sources:

• Personal contribution
• Bank loan
• KfW support loans
• Investment grants

If the project structure is right, banks are fully prepared to cooperate for production.

14-day action plan for buying or building a factory in Germany

First week

• Write a one-page Factory Vision
• Prepare a three-to-four-page draft business plan
• Make an appointment with the IHK for a consultation

Second week

• Negotiation with Wirtschaftsförderung
• Choose the main path (build or buy)
• Contact an architect or explore factory purchase opportunities
• Accurately determine your true capital

Are you ready to take the next step?

The factory is not just a dream; it is a strategic decision. Let’s make it right.

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